Foreign Liabilities & Assets (FLA Return) Under FEMA 1999

INTRODUCTION

Annual return on Foreign Liabilities and Assets has been notified under FEMA 1999 and it is required to be submitted by all the India resident companies which have received FDI and/ or made overseas investment in any of the previous year(s), including current year by July 15 every year. Non-filing of the return before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.

FLA REGISTRATION PROCESS

Firstly, you have to register on Flair Portal – https://flair.rbi.org.in  

Click on Registration Form for New Entity User, upon which the User Registration Form will be displayed on the screen.

Person has to fill all the details in the User Registration Form and attach soft copies of Verification Letter and Authority Letter in the Registration Form under their respective field.

Note – The soft copy of Verification Letter and Authority Letter is required to be kept ready. (*Format of both, Verification Letter and Authority Letter is available on the Flair portal.)

Below is the list of requirement for registration.

ENTITY DETAILS

• Entity Type *
• Corporate Identification Number (CIN) / LLP Identification Number(LLPIN) / Others (UIN) / Partnership Firm – as on latest financial year ending March*
• Entity Name*
• PAN of the Entity*
• Registered address of the Entity*
• Email*
• PAN of the Entity*
• Registered address of the Entity*
• Email*
• Mobile number of the Entity*
• State*
• District*
• Pin Code*
• Whether the CIN / LLPIN / Others (UIN) of entity has changed during the latest financial year ending-March* if yes enter the date of approval by MCA and old CIN.
• Whether the Name of entity has Changed during the latest financial year ending-March* – if yes enter the date of approval by MCA and old

AUTHORIZED PERSON’S DETAILS

• Full Name of Authorized Person
• User Name*
• PAN no of Authorized person*
• Mobile number of Authorized person*
• Email of Authorized Person

Once the details is completed click on Submit button. After submitted the application the registered user i.e. authorised person will receive default password. (You have to reset the password).

FLA FILLING PROCESS

The entire process of filling is divided into 5 Sections. We will explain one by one in details.

Section I – IDENTIFICATION PARTICULARS

Section II – FINANCIAL DETAILS

Section III – FOREIGN LIABILITIES (Investments made in India)

Section IV – FOREIGN ASSETS

Section V – VARIATION REPORT 

SECTION I – IDENTIFICATION PARTICULARS

Point No. 1 to 4 is prefilled – As per registration details

Point 05 – Account closing date – Select 31/03/XXXX

Point No. 06 – Nature of Business (As per National Industrial Classification (NIC) 2008 Code) : – Select as per National Industrial Classification Code 2008.

Point No. 07 – Whether your company is merged/amalgamated during year- if yes fill the details otherwise click on No.

Point No. 08 – Whether the Company is listed? – If yes fill the Name of Stock exchange were company is listed.

Classes/Type (provide number) – Enter the Type of Equity share

SECTION – II FINANCIAL DETAILS

Point 1 & 2 Total Paid-Up Capital of Indian Company

In first table enter the details of total Paid-Up Capital of Indian Company held as a Non-Resident Holdings (Only foreign holding required to field in that table)

Point 3 Profit and Loss Account (from P/L Account)

1. Enter Profit (+) / Loss (-) before tax
2. Profit (+) / Loss (-) after tax
3. Dividend(Interim and Final Dividend)
4. Tax on Dividend (if any)

Point 4 Reserves & Surplus (from Balance Sheet)

Reserves and Surplus (Enter total amount of reserve and surplus in Point 4.1 Table and in point 4.2 enter Profit (+) and Loss (-) account balance.

Point 5 Sales and Purchase made during the financial year

Enter the details of Total sale (i. e Domestic Sales and Exports) and Total Purchased (i.e. Domestic purchase and Imports).

Point 06 – Employee Information of reporting Indian company (in actual)

Enter the total No. of employees on payroll (in actual) during the previous financial year and current financial year for which return is to be filed.

SECTION – III FOREIGN LIABILITIES

Section III on foreign assets captures the information on financial details of Overseas Company in which your company’s equity holding is 10 per cent or more.

Companies are required to furnish the information on outstanding external liabilities and assets as on end-March of previous and latest year. In case if the accounting period of overseas subsidiaries/ joint venture of Indian reporting company is different from the reference period, then the information for end-March should be given on internal assessment basis.

Liabilities to Direct Investor is calculated as per OFBV Method

To calculate the market value of equity capital for unlisted companies use the OFBV method as follows:

Market value of equity capital held by Non- resident at OFBV

= (Net worth of the company) * (% non-resident equity holding)

Where, Net worth of the company

= (Paid up Equity & Participating Preference share capital of company + Reserves & Surplus – Accumulated losses)

However, in excel based format of FLA Return, Net worth of company will be automatically calculated at item 4.4 of Block 1C under Section II, which may be used for valuation of non-resident equity investment under Section III.

SECTION – IV FOREIGN ASSETS

Enter the details of Equity Capital (PUC), Reserves & Surplus of Direct Investment Enterprise (DIE) Abroad (10% or more equity holding by Indian reporting company).

SECTION – V VARIATION REPORT

In this table you just have to verify the details enter by your in section I to section IV and submit if it looks okay than tick the yes other modify the details.

*****SUBMIT***** 

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